Administrator

Please see a proposed revision of the Codes of Good Practice, in particular, Statement 000 (General Principles), as well as Code 300 (Skills Development). This is open for public commentary for sixty days, commencing on the 29th March 2018.

Key Amendments under Statement 000:

Enhanced recognition for Black-Owned entities. This amendment proposed that 51% Black-owned, as well as 100% Black-Owned entities can receive an automatic B-BBEE Level 2 and Level 1 recognition level, respectively. They only need to supply an ownership verification certificate, ensuring that the ownership is calculated on the flow through basis, not utilising any enhancements or deemed ownership percentages. This brings the Black-Owned generic entities in line with black owned EME’s and QSE’s.

Clarification of the calculation of B-BBEE scores for unincorporated JV’s, which was not in the previous version of the Codes.

The introduction of the Youth Employment Services (YES) initiative, and it’s enhanced recognition for B-BBEE purposes. This initiative, recently launched by the President, proposes an increase in B-BBEE Level Recognition for taking on unemployed youth, over and above an entity’s BEE initiatives. It proposes targets based on the NPAT of the company in terms of the number of youth to be taken onto the programme (instead of headcount), as well as minimum scorecard performance for participating entities. Companies can move up to two levels up from their performance if they reach double their YES targets, and they can also earn bonus points.

There are other amendments that seek to clarify as well as make the codes more compact.

Key Amendments under Statement 300 – Skills Development:

Introduction of a new indicator for bursaries, which splits the 6% spending on skills development. The new indicator’s target is 2.5%, while the spending on skills development for black people is adjusted to 3.5%. The rest of the scorecard weightings are also adjusted, although the weighting remains at 20 points.

Category F and G training can now represent no more 25% of the total training amounts claimed, which is up from 15%.

Unfortunately, the issue of what constitutes ‘Mandatory Training’, which is not claimable under this statement, is not addressed in this draft amendment.

Please submit any comments you may have directly to the DTI as per the instructions on the gazetted. Alternatively, speak to your nearest Empowerdex branch, and we can incorporate your comments into our comment letter.

The Department of Trade and Industry has issued the amended Tourism Sector Code, in terms of Section 9 (1) of the B-BBEE Act 53, effective immediately. All entities requiring a rating within the tourism sector, will need to adhere to this gazette.

Further to this, a draft of the AgriBEE Sector Code has been released and the public has been invited to comment for a period of 60 days. Details on where to send any written correspondence can be found on the first page of this document.

Should you need any further clarity on the above two sector codes, please feel free to speak to an analyst in your nearest Empowerdex office.

We bring you insights into the announcements made by the DTI in the last week;

The Minister of Trade and Industry, Dr Rob Davies (MP), published a Public Statement on the Commencement of Section 3(b) of the Broad-Based Black Economic Empowerment Amendment Act, 2013 (Act No. 46 of 2013) also known as the ‘ trumping provision”. What this then means is: if a law that was passed before the commencement of the Broad-Based Black Economic Empowerment Amendment Act, 2013 (Act No. 46 of 2013) is in conflict with the B-BBEE Act, then the B-BBEE Act will prevail, except in the case for Petroleum and Mining as per the clarification below.

The Petroleum and Mining Industries have been given a further 12 month extension on the requirement to align to the Amended Codes. Read the following notice released by Minister Rob Davies.

In addition, the DTI has called for the final submissions of sector codes; Sector Charter Councils have been given until 15 November to submit aligned sector codes to Trade and Industry or suffer the result of being repealed.

Should you need to understand any of the above in more detail, feel free to speak to an analyst at your nearest Empowerdex office.

Please see a circular providing clarity to Accounting Officers and Authorities onthe acceptance of sworn affidavits as required in terms of CoGP (2013).

Also for your reading are the King lll Practice Notes to give guidelines on how best to incorporate into strategy, and report on B-BBEE in such a way that will give stakeholders a sufficient way to comprehend the compliance level of an entity.

In July we provided a formula for calculating the Employment Equity section of the new Management Control Code, which also affects the Skills Development calculations. We have now finalised our Skills Development formula where you can change EAP targets, taken from the STATS SA website, as required between national and regional demographics (please make sure you adjust these figures accordingly). See the attached document for your use.

The draft Marketing, Advertising and Communication (MAC) Sector Code has been released by the DTI. The public have until the 4th of November to put forward their comments.

The main features of the MAC Sector Code that differ from the Generic Codes include the following:

• Black Ownership target of 45% which is higher than the 25% target of the Generic Code and other sector codes. The 45% ownership was negotiated with sector stakeholders and it will contribute towards increasing the number of black people that manage, own and control enterprises and productive assets of the economy.• The increase of the absorption points to 10 under the Skills Development Element which is higher than the five in the Generic Codes. Entities in the sector will be rewarded more for training and for providing employment opportunities for young black graduates. This was done to increase a pool of human resources in the sector especially among young black people and also contribute towards addressing unemployment in the country.

Those interested, may forward their comments in writing to: Email: This email address is being protected from spambots. You need JavaScript enabled to view it..

Feel free to contact your local office, should you require any clarity on the topics outlined above.

Please see attached communication from the DTI that provides some leeway and clarity on some issues that have been outstanding as we entered into the new phase of applying the 2013 Codes of Good Practice. Important points to note:

If your financial year end is before 30 April 2015 and you have not yet completed your verification, you may continue to obtain a verification using the 2007 Codes requirements. However, if your financial year end is after 01 May 2015, you will be required to use the 2013 Codes requirements, unless the Sector Codes are applicable to you.

If you are measured under a Sector Code, you may continue being rated according to that Code as the transition period has been extended to 31 October 2015. New Sector Codes will only be effective from 01 November 2015, which means the current sector codes apply until then.

The big shocker- where your ownership includes Black participants in Broad-Based Ownership Schemes and Employee Share Schemes, these schemes will only be accounted for under paragraph 2.2.3 (Economic Interest for Broad Based Ownership Schemes and or Employee Share ownership Schemes ). It is not yet clear what happens if a company has a normal trust that is neither broad based nor an employee ownership scheme.

There are other points raised in this clarification statement, and we would be happy to discuss further with you. Please do contact us.

A Tender Letter will be issued automatically at the start of the engagement process and is valid for a 3 month period, which is the time within which the verification should be completed even if there are delays. Tender letters may, unfortunately, not be re-issued upon expiry thereof. Please contact your local office should you have further queries regarding a tender letter.

The use of Empowerdex Branding

Once verified, a company may only use the Empowerdex Certified Empowerment Contributor trademark logo, when referring to its verification status once it has obtained the written consent of Empowerdex. Please consult the Standard Terms and Conditions of verifications for the terms of utilising the logo. It should be noted that use of the Certified Empowerment Contributor logo must be followed by the actual verified status achieved by the company, i.e. ‘Empowerdex Level Four verified’ and NOT simply ‘Empowerdex verified’. A company may not make use of the Empowerdex branding logo without permission in writing, from Empowerdex.

Certified Empowerment Contributor Trademark logo

The Certified Empowerment Contributor is a trademark which may ONLY be used by companies that have been rated by Empowerdex, South Africa's leading verification agency.

The introduction of the Certified Empowerment Contributor trademark is intended to enhance the credibility of your company's BEE status by allowing you the privilege of proudly displaying this token of your company’s commitment to BEE.

Companies that have been rated by Empowerdex and wish to exhibit the Certified Empowerment Contributor status, may use the trademark on corporate stationery, marketing materials and websites.

Who should use the Certified Empowerment Contributor trademark?

An Empowerdex verified company with a B-BBEE contributor status above a level 5, according to the DTI Codes of Good Practice.

Are there any costs involved?

Any company that meets the licensing criteria will be permitted to utilise the Certified Empowerment Contributor trademark for FREE.

How do I get to use the Certified Empowerment Contributor trademark?

If you are already rated by Empowerdex and have a contributor status above level 5, please contact our offices on 011 883 8548 or send an email to This email address is being protected from spambots. You need JavaScript enabled to view it.to license the use of the trademark.

Illegal use of both the Empowerdex logo and the Certified Empowerment Contributor trademark will be dealt with as per our internal policies.